Home construction estimates continue to suggest the same kinds of economic imbalances unchanged from last year. While construction of single family homes had been rising, that increase was not nearly as widespread and voluminous to indicate that the real estate market had been restored by full economic restoration (jobs, jobs, jobs). Apartment construction, on the other hand, has been scaled [...]
Economics in the orthodox version has it entirely backwards. If that wasn’t apparent in the last cycle, it is becoming far more so once again. This descent into math is not limited to econometrics, as it says a lot about the state of popular perception more generally. Computer models and statistics are given the moniker of “science” which is wielded [...]
The most important outbreak or story of 2015 had to have been the junk bond reversal. It combined all the major elements of what investors and economic agents are both fearing and, at one point in the past anyway, hoping. It is the confluence of finance, “dollars”, liquidity and economics with or without recovery and the best scenario. The FOMC [...]
If there is a shift in the credit scheme of the junk bond bubble of late, the reduced volume in issuance would suggest why. While issuance, including high yield and leveraged loans, has been volatile the past few years it had never been so persistently beaten down as it is now. In other words, there had been “slow” periods in [...]
This belongs with the last post on the highly “disturbed dollar” but I felt it deserved its own separate piece to feature downstream of funding. Given the liquidity backdrop describing a broad range of extraordinarily disconcerting prices and liquidity rates, the selloff picking up pace in junk is anticipated. Even still, the nature of the crash and that it is [...]
Now that Kinder Morgan has come out with a massive dividend cut, I think it will get harder to ignore that this isn’t just about crude oil prices and the death of “transitory.” There is a financial element here that is perhaps even more important. Kinder Morgan Inc., the biggest North American oil pipeline operator, cut its 2016 dividend by [...]
On December 11, 2014, spot WTI closed at $60.01, down sharply from $76.52 the week before that Thanksgiving. In the space of only a few weeks, oil prices had collapsed far more than anyone thought possible; and yet there was very little urgency to the outcome. Economists, in particular, parroted throughout the media, were quick to assert both a supply [...]
If China is struggling with the various facets of the interconnected nature of eurodollar function, then we don’t have to go far to see that in almost perfect clarity. By many accounts, funding and liquidity remain highly disturbed and becoming more uniformly so. From gold to francs to copper to junk debt, pricing reflects more so a combined economic and [...]
By all meaningful measures, credit markets today aren’t any different than they were after the first “dollar” wave crested and subsided. Despite all that has transpired all over the place in 2015, this resiliency is worrisome. No matter how much commentary wishes it to be a comforting tool of monetary policy adjusting into economic salvation, the fact that these indications [...]
The duality of gold in the modern wholesale fabric has perhaps been on display this year more so than at any time since 2008. That year, the year of the eurodollar-drawn panic, gold was seemingly more volatile than any other asset – if only for its virtuous tendency to as sharply rebound for every major crash. And in 2008 there [...]
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